October’s consultation on proposals arising from the Global Foreign Exchange Committee (GFXC) review of the global principles of good practice in the FX market (referred to collectively as the FX Global Code) was designed to clarify market participants’ responsibility to mitigate settlement risk and to enhance market transparency on transactions and the use of data.
It received a frosty response from the body that represents the collective interests of these organisations, though. The Foreign Exchange Professionals Association suggested that the risk waterfall approach recommended in the review doesn’t accurately capture other types of scenario where risk is addressed in a different manner and payment-versus-payment (PvP) settlement is not appropriate.
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